f 



Class 




Book t4_4. 

T57 



^^^ 



MR. PHILLIPS, OF MASSACHUSETTS, 



UPON THr. BILL iOK THE 



RELIEF OF THE 8UFFERER« BY THE FIRE AT NEW YORK. 



DELIlTLnK!) 



IN THK HOUSE (3F RSiPIffclSEN TATIVES, 



Febuuarv lb, 1836. 



\V A 8 M 1 ?< G 1' O .\ : 

N,ViU).\AL INTELLIGENCEIl OlFICL. 

1836 



\e8 






s p i: E C H. 



The House being in Committee of tlie Whole on the New York relief bill, 
and the motion of Mr. HardixV, to strike out the proviso of the first section, 
still pending — 

Mr. Phillips rose, and addressed the Committee as follows: 

Mr. Chairman: I bave felt it my duty to examine, with care, the provi- 
sions of this bill, and to weigh the objections which have been urged against 
n. From an acquaintance with the state of business, and the general situa- 
tion of merchants in the city of New York; from personal observation of the 
immediate effects of the recent calamity; and from inquiry into the probable 
extent of its wide-spread consequences, I have been convinced of the import- 
ance, nay, of the absolute necessity of some early provision, on the part of this 
Government, for the relief of its debtors in that city; and, upon reflection, 1 
am satisfied that it is not more the impulse of liberality than the obvious 
dictate of sound policy to do at least all that is proposed "in this bill. 

^ The bill provides for two objects: first, the relief of such debtors of the 
Government as were immediate sufierers by the fire; and, secondly, the re- 
lief of all who were indebted to the Government in the citv of New York at 
the time when the fire occurred. The proposed relief is confined, jn both 
cases, to debtors of the Government, and consists simply of an extension, 
without interest, of the time of payment of bonds given to secure the duties' 
iipon goods recently imported. This relief it is proposed to afford in the 
largest measure to the immediate sufierers, and in a less degree to the others 
who are supposed lo be liable to temporary embarrassment, if not direct loss, 
Irom the necessary consequences of such a calamity. 

The extension of payments thus provided for is an indulgence which the 
Government can grant, in the present state of its finances, without incon- 
venience, and, under the existing arrangements of the Treasury Department, 
without any sacrifice. Such is the amount of surplus revenue already collected,' 
that, if these bonds were paid at maturity, the Government would have no 
use for the money, and it would be suffered to lie in the deposit banks with- 
out interest. The effect of the bill will, therefore, be, to allow to the debtors 
of the Government, rather than to the banks, the gratuitous use of the amount 
of the bonds during the time of extension. So far as the privilejre which the 
banks would oiiierwise enjoy may be thus curtailed, they can have no ri<rht to 
complain, since the use of the Government balances that will still remain in 
their hands, must be more than an ample remuneration for the services they 
perform. -^ 

Alt that is proposed, then, is nothing more than an ordinary arrangement, 
to which, under various circumstances, creditors are often obliged to*'accede 
from considerations of prudence and liberality. In this case, while there may 
be reason to suppose that, by refusing such temporary accommodation, the 
Government might fail of securing its debts, it is clear that, by granting it. 
It will aff-ord direct and effectual relief to its debtors, and, in relieving so many 
r^^' , ™"'''' ^"^ '■^'^^'■^ confidence and hone to a distressed community 
ihe relation between the Government, as a creditor, and the citizens 



whom ,t requires to become its debtors, by giving bonds for '^"ji-^.^P^" '^^^'^ 

rr oin hnvpr and seller but from a egislative exaction, which creates tne 
:T^:' l,o"urf;r:;thh'',; .1. deM„r L •™„.edia.e,l.« -'_^aco,,u„ge„ 
Pnnivalent Let me endeavor to illustrate my meaning upon this point, con 
Sgh illustration to the case of duties secured by bonds I7- - y. 
nnon the arrival of a ship in port, before the cargo can be landed, tJie m 
Tter is Tuir d to execute his bond, with sureties, for the amount oi duties 
on the eoods consigned to him; and, from that moment, except that he is en- 
^UeS to a. a loU^nce for damage ascertained to have been i-urred during 
e voyage of importation, he is responsible to the Government for the amount 
his bo^nd, whatever losses he may incur in landing and storing the goods 
or vl ile th^v remain in store, before he has had an opportunity of disposing 
h m for consumption or export. Should the goods be exported, he is n- 
dtled to a drawback of the duty; if they are sold for consumption, the duty 
b comes an ncrement of value, and is received back by the >-P-ter .« U.e 
nrice which the consumer pays; but while they remain in the warehouse of the 

Zgov rnme^t holds him responsible ior the duties against ^ > -»; '^^j' 
should the goods be destroyed or lost, will still exact the payment oH"^ bond- 
Now it s obviously of no idvantag. to the importer that a duty - thus lev td 
lo nl s ooods, and it is as obviously not the design, of the revenue laws that he 
Tl hP . lose bv reason of his being held subject to the payment of the 
ty;' ut t'hTd'e ■ :r:hat the payme'nt of the ^-y shall dev.l^. ultimate y 
uDOi the consumer, and the Government employs the importe. as its agent 
?or colleCin- the duty from the consumer. When the importer has sold the 
^oods tore^onsumel (though he is obliged to take upon himself the risk of 
bad debts without anv guaranty from the Government,) he has realized a 
consider tionfbr his bond, and acquired the means ot paying it; but until 
hat con isg n y has occurred, he remains in the situation of an agent who 
non the Jceipt of ^^oods on consignment, has made an advance in cash o 
Tenanac emall^o his principal, without being able to avai himsell 
Z\eZ pr viC of the agent in such cases, of recovering from the principal 
t :!lliofZ advanci or acceptance, if the goods should be lost or de- 
stroyed in landing or in store, before they can be sold. 

^^"X^he disadvantage and injury to which the importer - ;'-4-P;-^^;;,^ 
be attributed to a prominent defect in our revenue laws-lhe ^^ ant ol a V are 
Houlo svsTEM.' In England, where that system, alter --y g-^- e - 
forts to establish it, has been in full operation since 1826, the eMl does not 
ell. It is there provided that the importer, upon landing his goods, may 
deposit them, under the inspection of officers ol the customs, m a 'ware- 
house of spe lal security," as it is termed, which may be a private store or 
quay duly^licensed for the purpose, under prescribed regulations; and he 
goods J allowed to remain in such warehouse for a term of hree years, 
fubiect only to the standing bond of the proprietor or occupier of ^^e wa.e- 
housTor the special bond of the importer, "for the payment ot the ful du- 
tie of importation, or for the due exportation of the goods " If -u ■" \ reo 
vears the coods are exported, the bond is discharged; if they are taken for 
Lme use," the duties L payable in cash upon delivery fronr. the warehouse 
WhUe the goods are warehoused, the duty does not accrue; if they are lot or 
destroyed by unavoidable accident in the warehouse, the duty is not held to 



be payable; or, if tliey are lost or destroyed " in landing or shipping," or " in 
the receiving into, or delivery from the warehouse," the dut>', "payable or 
paid," is remitted or returned. While the goods remain in the warehouse, 
sales may be made by one party to another, (the law prescribing a mode of 
transfer,) and the purchaser succeeds to all the privileges of the importer; or, 
rather, tlie privilege attaches to the goods, so long as they remain in the ware- 
house, whatever may be the changes of ownership in the meanwhile. It is 
not until they are "about to pass into immediate consumption that the duty is 
payable; and thus the importer has the opportunity of collecting the duty from 
the consumer before he is required to pay it to the Government; and it is 
only after the goods have passed into the consumer's hands that the Govern- 
ment is released from the risk of losing the duty, in consequence of any una- 
voidable accident (by fire, or otherwise,) that may befall the goods. 

Such, Mr. Chairman, is the design of the English warehousing system; and 
the gentleman from South Carolina (Mr. Pickkns) will perceive, that, in a 
case hke the present, it would save harmless (in respect to liability for duties) 
most of the importers, for whose partial and temporary relief this bill makes 
provision. Had the English system been in operation at New York, a large 
proportion of the imported goods destroyed by the fire would have been ware- 
iioused; the duty would not have accrued, and would not have been payable; 
and the Government could not have been a gainer by the calamity, as it now 
niay be, since it has secured the duty upon all goods which, if not burned, 
would have been exported, and will derive an increase of revenue from the 
importation of goods required to supply the place of those (also burned) which 
were intended for consumption. 

1 regret, sir, that the warehousing system could not, long since, have been 
introduced here. As perfected in England, ii affords innumerable advantages 
to the commerce of the country, and has not proved liable to abuse. I per- 
ceive no sufficient obstacle to its introduction here. The principle was par- 
tially recognised in the sixtieth section of the act of Congress of 2d March, 
1799, providing for the landing, storing, and re-lading of the cargoes of ships 
arriving from foreign ports in distress, without requiring the consignee, in such 
cases, to enti^r the goods and secure the duty. The allowance of drawback 
upon goods exported, is also a partial recognition of the principle; but, it is 
only by adopting the system in its entire extent, that we can secure to our 
citizens the same advantages of foreign trade that are now enjoyed in Eng- 
land, as well also as at most of the principal ports of the continent of Europe. 
The fire at New York furnishes striking proofs of the injury and injustice to 
which merchants are exposed, from the want of the system; and I shall con- 
sider it as the strongest indication of friendly regard for the mercantile in- 
terest, whenever Congress shall see fit to entertain a suitable proposition in 
reference to this object. I shall cheerfully vote for this bill, because I con- 
sider it founded in the most equitable principles, and because it provides for 
a case of suffering of appalling magnitude; and yet I am not unaware that it 
furnishes some foundation for the charge of partial legislation, inasmuch as 
there have been other cases, similar in all important respects to this, in which 
importers, from unavoidable accident, have been subjected to the loss of goods 
upon which they had secured the duties, and have received no relief from the 
Government. It is impossible to refer to any single case which exhibits an 
amount of loss at all approaching to what has been sustained at New York; 
but I am safe in saying that the aggregate of losses in such cases as the 
Government has failed to provide for, if it could be ascertained, would prove 
that importers have been hitherto great sufferers from the unjust operation of 
laws which are still in force, and from the want of a system which might 
easily be established. 



The gentleman from Soiitli Carolina, (Mr. Pickens,) niisappreliending, as 
'. conceive, the relation hetween the (iovernnuMil and tiie importer, npon 
vhicli tlie provisions of this hill are founded, lias illustrated his view hy the 
issertion that the claim ii(ion the Government is the same, or that there is 
!quallv no ground for a claim, whether the snflerer hy fire is an importer at 
Sew York or a purchaser of imported goods at Cincinnati. The Government 
s clearly under no obligations to the dealer at Cincinnati. It has subjected 
lim to no legislative exactions; it holds him under no peculiar responsibilities; 
it sustains towards him no other than the ordinary relation of Government 1o 
I citizen. It is, more especially, in no sense his creditor; it has no demand 
igainst him as a debtor; and, most of all, it cannot regard him as a debtor, 
jf whom it is requiring the payment of a debt for whicii it iias given him no 
equivalent, and in regard to whom the contingency, upon which alone de- 
pended the opportunity of his realizing an equivalent, through unavoidable 
iccident, cannot occur. This, then, is the distinction between the two cases, 
resulting from the widely difi'orent relations which the supposed snfl'erers sus- 
tain towards the Government. When the foreign goods pass from the im- 
porter to the consumer, (or to the consumer's agent, the purchaser for con- 
sumption,) I agree that the duty becomes an increment of value; that the 
importer then realizes the equivalent for what he has paid or owes the Gov- 
ernment; that from that time the importer can have no claim upon the 
Government, growing out of the peculiar relation which he had assumed; 
and, that of course he cannot transfer to the consumer, or his agent, an 
equitable right which was peculiar to himself as an importer, and has ceased 
to exist. The purchaser for consumption buys the foreign goods of the im- 
porter, as he would buy any other goods, for a fair consideration, and after- 
wards holds them, as he would hold any other goods, at his own risk. His 
contract with the importer does not involve any assumption of res|)onsibility 
to the Government; he cannot therefore prefer a claim against the Govern- 
ment as resulting from that contract, and there is no other ground upon which 
he can rest a claim. Whenever the Government shall return to a system of 
which its experience has been too unfortunate again to recommend the adop- 
tion, and shall lew an excise upon whiskey before it has been removed from the 
vats, or, at least, from the warehouse of the distiller at Cincinnati; and when 
that distiller can state tlie fact to Congress, that, as one of the sufferers by an 
awful conflagration which has reduced to ashes an extensive section of the 
thriving emporium of the west, he has been deprived, by the destruction of 
his property, of the means of recovering from the consumer the amount of 
the excise which he has paid or owes the Government, there may be a case 
at Cincinnati resembling, in some of its features, and in its equitable claims 
to the consideration of Congress, the present case at New York. 

I have thus far confined myself to a statement of some of the reasons which 
induce me to regard it as an act of justice, to make provision for those debtors 
of the Government who have been immediate sufferers by the fire — the first 
class designated in this bill. My convictions lead me to the conclusion that 
the most reasonable objection to the first section of the bill is, that it falls 
short of its proper object; and that it should have provided, not simply for 
an extension of the time of payment, but, under suitable regulations, to pre- 
vent fraud, for the absolute remission of the duties upon all goods subject to 
duly which were destroyed by the fire. And, sir, if any argument applicable 
to this case is to be drawn from that clause of the constitution which requires 
duties to be " uniform," I submit to the gentleman who has quoted it, (Mr. 
Pickens,) whether it is not virtually a palpable disregard of uniformity to 
require of the importer, whose goods perished io the fire on the day of their 



landing, or on tlie day preceding lliat on which (the outward entry, perliaps, 
having been lodged at tlie custoni-hpiise) tliey were to have heen exported, 
<>r on any intermediate day, so long as they remained in his hands undisposed 
of for consunjption or export, the same duty wiiicii has been paid by anotiier 
importer, who has received the duty from the consumer, and has thereby been 
enabled to act as the law intended he should act, merely as the agent of the 
Government, in collecting the duty which is thus actually paid by the con- 
sumer? Upon a proper construction of the clause, however, 1 do not consider 
it as furnishing any argument applicable to this case; and I suppose it only 
designed to prescribe that the general revenue laws shall operate eijually and 
alike throughout the country, without restraining the power of Congress to 
make suitable provision for extraordinary cases arising under those laws, as 
necessity, justice, or the public interests may require. I will barely subinit, 
in this connexion, that, to insure the most salutary efiect to this and every 
part of the constitution relating to the collection of revenue from imports, 
and to the regulation of commerce incident thereto, there is no kgal provision 
so practicable, so simple and certain in its operation, and so well adapted to 
exclude cases of special legislation, as a warehousing system. 

It is my deliberate opinion, for the reasons which I have stated, that the 
importers of " dutiable" goods, destroyed by tlie fire, and upon which the 
bonds are in the course of collection, may justly claim a remission of duties. 
If the bonds have been collected, or if the duties were paid in cash, I hold, 
for the same reasons, that the amount of duty, in such cases, should he re- 
funded. But, at this point the gontlenian from Pennsylvania (Mr. Chambers) 
encounters a ditficulty which, it appears to me, may be easily removed. Con- 
fiuino' himself to the case of bonds which have been paid, he says, that as 
soon as they are paid, the relation of creditor and debtor ceases; and that 
thereupon tiie claim of the importer upon the Governn)ent expires. Allow 
nu! to suggest to him, that, though the bond has been paid, if good cause shall 
subsequently appear why it should not have been paid; or if it can be shown 
that the consideration for which the bond was given has not been and could 
not be realized; or if, where the duty was paid in cash at the time of entry, 
the exportation of the goods has entitled the importer to drawback; that, in 
all these cases, the fact of payment has not settled the account; and that, it 
may be, the relation of creditor and debtor, instead of having ceased, has in 
effect been reversed, the Government having become the debtor for the 
amount paid, and the importer as a creditor being entitled to reclaim it. The 
English law, in the cases to which I have referred, authorizes the commis- 
sioners of customs to " remit or return" the duties " payable or paid;" and 
the gentleman in justice must acknowledge that, when he can agree that the 
duty cannot equitably be claimed by the Government, he should be equally 
ready to refund the money if it has heen paid, or to give up the bond if it 
has been secured. He surely will not attempt to screen the Government from 
the obligation to do equal justice to two claimants, similarly situated in respect 
to the merit of their claims, merely because one claimant had been obliged 
or had chosen to advance the amount which he claims in cash, and the other 
had been suffered to substitute his bond; or between two claimants similarly 
situated in all respects, except that both having given their bonds, the bond 
of one should happen to fall due the day before, and that of the other the 
day after the occurrence of an event which it is admitted annuls the con- 
sideration for which both bonds were given. 

Instead of providing for the remission of duties on goods destroyed by the 
fire, and for refunding the money in such cases when the duties have been 
paiti, the hill simply provides (with the single exception of the first proviso in 



8 



the first section) for an extension of credit to tlie importers, to allow them 
time to recover from the necessary embarrassment of their present situation; 
and to aftord them some advantage in the savins; of interest npon the amount 
of tiieir bonds. The gentleman from Vermont, (Mr. Everett,) regarding this 
extension in fiie nature of a loan, would charge them with the full rate of in- 
terest. Had thest; debtors actually received the principal of ihtir debts from 
the Government, the charge of interest might not be deemed unreasonable, 
were it not that their unprecedented misfortunes entitle them to the most libe- 
ral indulsfence usually or ever granted under extreme circumstances; but I 
submit to the ijentleman that the principal of the debts, that is to say, the 
amount of the bonds, has not been received by the debtors when the goods, 
upon which the duties accrued, have been destroyed in their hands before 
thev have been enabled to dispose of them. With this understanding of 
the case, I am sure he will agree with me that, if the Government is not 
bound in equity to release the debtors altogether, it will have been suffi- 
ciently rigorous in prosecuting its legal claims against thorn if it should allow 
a short season of delay before insisting upon payment. I i)ave already sug- 
gested that, by the existing Treasury arrangements, if the bonds were promptly 
paid, the Government would sufl'er the n)oney to lie, without interest, in the 
deposit banks; and that, therefore, the Government cannot be a loser by al- 
lowing the proposed extension. The gentleman says that the arrangements 
with the deposit banks have not bceti made, and will not be continued, with 
his consent; and that he would not permit the use of the Government funds 
either to importers or banks without requiring interest. I agree with the gen- 
tlenjan in all his general views in respect to the management of the public 
money; but I presume he has as little faith as myself in the practicability 
of changing the present system; and that he cannot be disposed, (yet such 
would be the virtual operation of his amendment,) to restrict >the demand of 
interest to such suflerers as this bill provides for. 

It is undeniable, as has been suggested by the gentleman from Vermont 
and others, that the proposed extension of payments to the immediate suflerers 
will aflbrd relief unequally, and, in some instances, in striking disproportion to 
the losses actually incurred. Any provision which comes short of remitting 
the duties upon all dutiable goods destroyed by the fire must operate unequally; 
and if this consideration should lead the committee to determine that it is 
more equal as well as more strict justice — in other words, that it is the only 
modeof doing justice — to authorize such remission, I sliall be entirely-prepared 
to acquiesce in the decision. Still I cannot abandon the bill in its^ present 
shape, from an apprehension that its beneficial effects will not precisely cor- 
respond to its design in all the cases to which it may be applied. We can pass 
but few laws not liable to this objection; and, in respect to this bill, I con- 
tent myself with the conviction, that it will produce much general benefit, and 
can furnish but faw causes of complaint. I would prefer, as a substitute for 
the first section, the provision in favor of which I have argued; but the bill 
comes to us from the Senate; the committee who have it particularly in their 
charge, do not propose to amend it; and I am willing, under such circum- 
stances, to take it as I find it. T do so the less reluctantly, as we^iiave had 
an intimation that the provision I desire may vet be proposed in a separate 
bill. 

The second section of the bill proposes to relieve all the debtors of the 
Government in the city of New York, by allowing an extension of the time 
of payment of " all bonds given prior to the fire." The section, in my view, 
is imperfect, in not providing for a similar indulgence in regard to the pay- 
ment of cash duties; but still, so far as it goes, I am disposed to advocate it 



upon the ground of public policy, and to regard tlie measure it proposes as at 
least an act of wise liberality. To judge of the expediency of this measure, 
all the peculiar circumstances of the case deserve to be considered. 

The lire at New York has been justly represented as a most desolating 
calamity, unprecedented upon this continent, and with only one or two paral- 
lels in the history of the world. This is a just, but, for our purpose, too gen- 
eral a description. It becomes us to consider it in its necessary consequences 
as a commercial embarrassment, and, by inquiring into the nature and extent 
of these consequences, to satisfy ourselves how far it has affected the debtors 
of the Government, who constitute a large portion oi" the merchants of the 
city of New York. 

What is the city of New York, and who are its merchants? The city of 
New York is, far more distinctively than any other city, the commercial em- 
porium of the United States. The advantages which it derives from its cen- 
tral position, and from its unrivalled facilities of connnunicalion wilh every 
section of the country, and every quarter of the globe, have made it the grand 
depot of imports and exports, the principal resort of merchants and traders, 
and a scene of imparalleled enterprize, industry, and improvement. To use 
an expression which can hardly be considered as far-fetched here, it is the 
seat ot the commercial congress of the western hemisphere, in which everv 
State of the Union and all foreign nations are more or less numerously re- 
presented by resident agents, and where negotiations are yearly effected of 
sufficient magnitude to constitute a leading item of the business of the world, 
I speak of the city of New York as a commercial emporium; and, regarding 
it as such, who can behold its situation, or trace its rise, or contenijilate its 
destiny, without emotions of admiration, astonishment, and pride? It is already 
called the Loudon of America; and it has ceased to be extravagant to 
suppose that the time may come when this appellation will insufficiently 
represent, if not the number of its inhabitants, at least the extent of its com- 
merce and the magnitude of its resources. 

And who are the merchants of New York? They are, as 1 have said, re- 
sident agents from e\eiy foreign nation, and each State of the Union can 
number among them the choicest specimens of one of the best classes of its 
population. So intimately are they connected with every State, that perhaps 
there is scarcely a gentleman upon this floor who would not recognise among' 
them some of his personal acquaintances, and constant or occasional corre- 
spondents, or, at least, many of whose constituents could not fail thus to re- 
cognise them. Known, therefore, as they are, personally, or by their general 
reputation, 1 must presume that the gentleman from Kentucky (Mr. Hardin) 
does them unintentional injustice, when he alludes to them in terms, which, if 
not conveying a direct reproach, are adapted to excite an unfounded preju- 
dice. But whatever may be his object, he cannot succeed in combatting the 
public sentiment of the country. The merchants of New York have an estab- 
lished character for intelligence, enterprize, and probity, which, while it has 
been the brighte' ' or'nament of their prosperity, will prove to them the guaranty 
of universal sympathy and confidence in the season of their adversity. They 
occupy the front rank of the merchants of the country; and throughout the 
ccv'.ntry they are respected, honored, and will be sustained as eminent con- 
tributors to the national welfare, as indispensable agents in the accumulation 
and dilll'usion of the national wealth, and as worthy representatives of the na- 
tional character in the wide extent of their commercial relations. 

The merchants of New York are and always have been the principal debt- 
ors of the Government, or its principal agents in the collection of its revenue. 
At the custom-'house in that city, and from the hands of its merchants, there 



10 

have already been collected between two and tiiroe hundred millions of dol- 
lars for the use of the country; more than one-half of the imposts regularly 
iiccrues there; and upon the ability and integrity of the merchants of New- 
York, therefore, the Government must mainly depend for iis available re- 
sources. The facts which are upon the records of the Treasury Department 
attest that, while the Government has been always a strict, and sometimes ai> 
inexorable creditor, it has sustained oidy the most inconsiderable loss from 
the insolvency or fraud of its debtors in New York. Hitherto, they hav<! 
rarely as individuals, and never collectively, urged claims to its indulgence, 
hut have promptly and scrupulously fulfilled their engagements; occasionally, 
too, during periods of serious embarrassment. Even now, when overwhelmed 
with distress, they adhere strictly to their obligations, and not a bond, except 
by the voluntary permission of the collector, remains unpaid. JSince the 
lire, the collector, in the use of a sound discretion, although in the exercise 
of an authority not strictly conferred by law, has permitted bonds to lie over, 
conformably to a suggestion of the Secretary of the Treasury that some sea- 
sonable measure of relief might be expected from Congress. The present 
bill is designed to satisfy that expectation. 

Having said thus much in justice to the city of New York, to the charac- 
ter of its merchants, and to their relations to the Government, I will ask the 
attention of the committee to some of the circumstances of the case which 
have determined my own judgment in legard to the expediency of the pro- 
vision contained in the second section. 

The fire laid waste a section of the city occupied by the merchants as a 
place of business. When I visited the scene a tew days after the sad event, 
I beheld an area of fifty acres covered with smoking ruins, and strewed with 
fragments of damaged goods partially rescued from the flames. I perceived 
at once that the immense mass of buildings which had been thus laid pros- 
trate consisted almost entirely of warehouses, the occupants of which 1 re- 
collected to have been chiefly iniporting merchants, commission houses, or 
t^rocers, such as were always the liolders of heavy stocks of goods, the ag- 
gregate value of which must have usually exceeded the largest estimate of 
the loss which is supposed to have been sustained. I was told that the work 
of destruction had been so rapid, that, in addition to the loss of buildings and 
goods, many of the merchants had not been able to save their books, notes, 
and papers.' Now, Mr. Chairman, viewing this fire as a commercial embar- 
rassment, I wish to remark that no ordinary estimate of the value of build- 
ings and goods destroyed can convey a sufficient idea of the actual sufl(?ring 
which has been produced, nor even of the positive pecuniary loss which has 
been and is yet to be sustained. These sufferers are almost exclusively mer- 
chants, who were holding a large amount of |)roperty, enjoying an ex-tensive 
credit, and engaged in profitable business. In consequence of this fire, not 
only is their property destroyed, but, to a greater or less extent, their credit 
must be impaired, and their business, for a time at least, is stopped. All their 
previous engagements, nevertheless, remain to be fulfilled. The fire, while 
it has destroyed their property, has left the debts which they owe untouched. 
While it has burned their books, it has not finally balanced them. Their 
notes and bonds Will still be produced against them, although they have lost 
the record of their amount. They had used every precaution to guard 
against such a calamity. Their buildings were properly secured — some 
supposed to be fire proof. Whatever was the origin of the fire, none 
of them, at most with but one exception, are chargeable with carelessness; 
and they had insured their property lor its full value. But the insurers were 
not insured! It is an incident of this case, which distinguishes it above aU 



11 

olliers in the aggravalion of misfortune, that tlie first names inscribed upon 
tlie list of bankruptcies attributable to tlie fire, were those of one-half of the 
fire insurance companies, who, perliaps, will not be able to pay upon an av- 
erage above fifty per cent, of the demands against them, and may be com- 
pelled by tlie state of their affairs to postpone the payment of this meagre 
dividend to a period too late to aflbrd seasonable relief. 

Without going into fiirther details, Mr. Chairman, I leave you to judge, 
from tliis strictly accurate description, of the actual condition of the mer- 
chants who were immediate sufl'erers by the fire. Estimate if you can the 
necessar\' effect of these combined causes of suffering: destruction of prop- 
erty, diminution of credit, suspension of business, overhanging debts, failure 
of insurance — follow them out in their remote consequences, and contingent 
results, and tell me wliat sum of money will sufficiently denote the real ex- 
tent of the deplorable calamity? Set down the loss of buildings and goods 
at $'25,000,000, and consider this as only the first item in the account. Es- 
timate the value of the credit which such a capital in the hands of merchants 
in active business would usually command, and make that the second item. 
Calculate the accruing profits of the business in which all these merchants 
were engaged, and also determine what the privilege is worth to so man}' 
merchants of being well established in business; let this be the third item. 
Conjecture (for it can only be conjectural) the amount of the sacrifices of 
property which the pressure of debts, under such circumstances, and the sus- 
pension of demands against insurers must occasion; and stop here: what is 
the aggregate? Could the figures be cast and the sum stated, I think it 
would be sufllicient to convince the most incredulous that the immediate suf- 
ferers are entitled, at least, to the scanty indulgence which the first section 
of the bill provides for them. 1 think it would also be a convincing and 
alarming proof that such an overwhelming calamity cannot be confined to 
the immediate sufferers, but must, in its consequences, extend far beyond 
them. I think it would satisfy the gentleman from Kentucky that such an 
amount of loss may have given "a shock" to the business and credit of the 
whole city; and I am sure it must compel him, if he will undertake to esti- 
mate it, to carry his conceptions far beyond his ordinary standard of magni- 
tude in money matters, and quite as much beyond the range of his previous 
acquaintance with the nature and extent of commercial transactions. 

When the ravages of the fire had ceased, and the inhabitants began to re- 
cover from the bewildering sensations of terror and alarm which at the in- 
stant overcame them, how did they regard their general situation? They 
saw, as they were collected on the spot, that though only a section of the city 
had been destroyed, the whole community was doomed to suffer by the ca- 
lamity; that, though the wound was local, the stroke of the destroyer had 
been aimed at the heart; that, though it was an easy matter to complete 
the list of immediate suflTerers, it was difficult to know where to begin or 
where to end in enumerating the many and many others who could not 
escape uninjured. The merchants, more especially, instantly perceived that 
not one of their number was a disinterested spectator of such a scene of ruin; 
but that, connected as they were by mutual interests, and bound together by 
reciprocal obligations, the consequences which would result frofn such a de- 
struction of property, and a corresponding prostration of credit, and conse- 
quent suspension of business must affect thein all. The dense cloud of smoke 
ascending from the spot to which the fire was confined, had overshadowed 
the whole city, intercepting for a time the bright beams of the returning sun; 
and these merchants felt that a heavier cloud of distrust and embarrassment, 
produced by the misfortunes of the immediate sufferers, was fast gathering 



12 

over them all, threatening to blast the gilded prospect of the near future, and, 
the precursor of events which might involve them all in temporary distress. 
They felt at once that it was their common duty to prepare for the worst. 
The impulse of sympathy with their neighbors was blended with the instinct 
of self-preservation. In the manifestation of mutual confidence, in the readi- 
ness of each to sustain every othc'r, in that spirit of accommodation to cir- 
cumstances which belongs to the mercantile character, they proceeded to 
provide for tlu; enx-rgency. To guard against the unavoidable scarcity of 
money, and the consequent difi'iculty of meeting such of their debts as were ap- 
proaching niaturity, they appealed to the banks to co-0()erate in all practica- 
ble measures of relief, and the}' imparted the force of public opinion to the 
obligation of creditors to grant indulgence to their debtors, by the extension of 
payments. They called upon the Kank of the United States to apply all the 
means within its disposal for their accommodation; they called upon the city 
tjovernment to create slock which might be made available capital; they 
invoked the State (iovernment for its prompt and liberal interposition in 
various acts of legislation; and they appealed to the General Government to 
fissume its just share of loss, to postpone the collection of its superfluous 
revenue, and to give such a direction to its finances that they might be ren- 
dered more contributory to their immediate benefit. 

I am convinced, Mr. Chairnian, that none who have made due inquiry into 
all the circumstances of their situation, can suppose that the merchants of 
New York have acted with a greater degree of foresight or vigor than the, 
accasion required. Fortunately for them the fire occurred at the season of 
the year which afibrds almost their only respite from the pressure of business, 
and they were enabled to avail themselves of a brief leisure to concert and 
attempt to execute their plans. The efforts which they have made are me- 
morable proofs of tiianly fortitude and dauntless perseverance, which deserve 
if they should not achieve success. They illustrate a public character which 
is entitled to universal admiration. They indicate a determined purpose, 
which, if any thing can, will sustain them in their most unequal struggle with 
adversity, and enable them to start forward with redoubled energy upon a 
prosperous career. 

The crisis of their fate is still impending. The extent of the calamity is 
not yet developed in its results, and a period is approaching which must put 
to the severest test their ability to support themselves. Independently of 
their own fruitful sources of embarrassment, the signs of the times indicate a 
fearful tendency of events to aggravate and multiply the dangers of their 
situation. What is the state of things in the country at large? Greatly 
brightened, I delight to acknowledge, by the cheering intelligence which we 
have this day received, but still sufiiciently perplexed to deserve anxious con- 
sideration. A year of unexampled prosperity has closed, and another year 
has commenced, of which they who survive its termination may be obliged to 
render a different account. A year has commenced fraught with results, 
which must leave a durable impression upon the political and financial condi- 
tion of the country. Never were men of business more unprepared for sudden 
reverses and severe pressure, and yet never,perhaps, has there been more signal 
occasion to apprehend both. The over-trading of the past year, the rage for 
wild speculation, the abused spirit of enterprise, have led, as it would seem, 
to almost every conceivable misapplication of capital, in whatever form it exists, 
and to an extension of the system of credit to so dangerous an extreme that it is 
difficult to imagine any mode of rescue from the evils which it must produce. 
The present state of the money market afUbrds some indication of what may 
yet be expected; and let any member who has the means of forming a correct 



13 

judgment, turn his attention to the general situation, at the present moment, of 
"men of business, and of the many who, in the use of the most unheard-of 
expedients, and under the impulse of the maddest passion for adventure, have 
forced their projects and extended their transactions so vastly beyond^the 
views and purposes of men of business, properly so called; let him endeavor 
to form some idea of tl e unprecedented financial demands of the coming 
year, of the engagements to be met, the contracts to be fulfilled, the notes 
and bonds to be paid; let him consider the strained condition of the State 
banks, and the necessary effects of the approaching dissolution of the Bank of 
the United States, unless, indeed, they are to be obviated by a modified re- 
suscitation of that important institution; let him anticipate the various vicissi- 
tudes which usually precede and follow a diminution of the value of the 
leading staples of the country and a general depreciation of real and personal 
property; let him notice the consequences already experienced at New Orleans 
of a suspension of the trade with Mexico; let him bear in mind the contingen- 
cies to which all branches of our foreign trade are constantly liable; and then 
let him judge of the influence — tjie combined influence as it may prove — of all 
these causes of commercial embarrassment upon the straitened condition of the 
merchants of New York. Let him then decide whether the circumstances are 
not, or may not be, such as to justify this Government in extending to its debtors, 
and all its debtors, in that distressed city, the same measure of indulgence which, 
amongst themselves, no creditor is suflkiently regardless of his honor or his in- 
terest deliberately to refuse. Let him decide whether, when all their other ap- 
plications for assistance have been freely granted, their resort to the General 
Government shall be coldly, and sternly, and harshly repulsed. Let him con- 
sider whether, when the stroke which has fallen so heavily upon that city is 
universally regarded as a national calamity, and when all that can be done for 
her relief must be alike regarded as a national benefit, he will assume the re- 
sponsibility of deciding that this Government may safely, and wisely, and hon- 
orably postpone the claims of its debtors, and refuse to listen to the united and 
urgent appeals of so many of its citizens. 

I have already noticed some of the objections that have been urged against 
this bill: there are others which may be supposed to deserve consideration. 
The gentleman from Kentucky, (Mr. Hardin,) with his characteristic prompt- 
ness, commenced an attack upon the bill before, as it proved, he had become 
acquainted with its provisions; and, in the use of his accustomed weapons of 
sarcasm and invective, endeavored to array against it the untimely influence 
of sectional and political prejudice. In glancing at his objections, let me re- 
spectfully suggest to him, that, if it be the misfortune of these debtors, it surely 
is not their fault that the city in which they reside has become the principal 
depository of the public revenue; and that the Government does not make 
the most profitable use of its funds which are there collected. If it be their 
misfortune, it surely is not their fault that the State^'of which they are citizens 
possesses, under the constitution, a vast share of political influence; and that 
this influence, here and elsewhere, has been, and is likely to be, applied to 
purposes which that gentleman does not approve. Upon this occasion, he 
oucht to remember that the claim presented fur his consideration is one totally 
disconnected with political or sectional considerations — the simple, naked, and 
(as I had hoped all would regard it) indisputable, irresistible claim of the suf- 
ferers by an unprecedented calamity, who claim no other service at his hands 
but such as is due to the circumstances to which this calamity has reduced 
them. He ought to remember that, if so large a proportion of the revenue 
is, and must continue to be, collected and deposited in the city of New York, 
it is of great importance to the interests of the Government to prevent the 



14 

occurrenre of general embarrassment and distress; one consequence of which 
will be, to enddngur the security of the present depositcs, and greatly to en- 
hance the risk of l)ad debts, in respect to the bonds which remain unpaid. 
He ought to remember that, upon llie prosperity of New York, llie accruing 
resources of the Government are immediately dependent; and that, whatever 
the Government may now do for the temporary accommodation of tlie mer- 
i.liants of that city, will be more than repaid to the national treasury i)y the 
future resiihs of tlieir persevering and successful enterprise. The gentleman 
also owes it to iiimself, to his constituents, and to the country, not to forget 
tliat all sovtional interests are merged in the welfare of the great commercial 
metropolis of the Union. He should not forget that such are the indissoluble 
relations of New York to all parts of the country, that they must share In its 
prosperiiy an'd misfortunes, ile should not forget that, directly or indirectly, 
(he planters, manufacturers, and traders of Kentucky have always something 
at stake in New York; and that he fails to consult their interests, and must 
be presumed to oppose their wishes, when, in a time of the greatest need, he 
refuses to i;xtond the helping hand of the Government for the relief of those 
with whom, by all the ties of mutual dependence, his constituents and the 
people of the whole country are thus intimately connected. I am sure, sir, 
that I do not give to this consideration an undue importance. I am sure that 
neither the genlleman from Kentucky, nor any other gentleman who will 
allow himself to exercise a practical judgment upon this view of the sub- 
ject, will disaorcc to the conclusion that the business of New \ork is in effect 
the business of the whole country; and that a sudden interruption and exten- 
sive derangement of the business of that city will prove a check to the pros- 
perity of the whole countr\'. 

The gentleinan froui Rhode Island (Mr. Pearce) has tasked his ingenuity 
to produce popular objections to the object of this bill, and has perhaps been 
more successful than the gentleman from Kentucky in exciting the prejudices 
of some members against it. He has proved, 1 think, that the title of the 
bill is not suflicicntly definite, but has erred in supposing that the object 
which he considers to be implied in the title is, or ought to be, recognised 
in our le>'^islation. The provisions of the bill are designed to extend the 
indulgence of the Government to those who are its debtors in the city of 
New York, and exclusively to such as are its debtors. It proposes to afford 
them the same indulgence which other creditors, under similar circumstances, 
which other creditors in New York, at this moment, have extended to their 
debtors. If it were proposed — if it were expedient, to attempt to relieve al! 
sufferers by the fire, without reference to the peculiar relation which some of 
them sustain to the Government, the gentleman woidd do right to vindicate 
the claims of such as are not now provided for; and, if the bill were designed 
to be merely an act of charity, he might properly argue that the merchants of 
New York are the last who should receive, as he must well know they are 
the last who would accept, the bounty of the Government. But when the 
gentleman perceives that the single object of the bill (which I agree ought to 
be expressed in its title) is to make an equitable provision for the debtors of 
the Government as such, he can hardly consider it a justifiable mode of de- 
feating this object, to attempt to asperse not their character, but their occu- 
pation, and to inveigh not at all against the equity of their claims in reference 
to the j:rouuds upon which alone the claims are urged, but in a strain — I will 
not say of vulgar abuse — but of unmerited censure, against the necessary inci- 
dents of the rank in society to which the circumstances of these debtors have 
entitled them. I have no doubt that the recent fire has furnished many case.s 
of such as are not debtors of the Government, whose claims to sympathy and 



15 

I'elief are quite as strong as the gcmleniaii rrpiesents tljem; and I liope and 
believe that those rlainis will be cliecrriilly rccojjnised by all to whom they 
can be properly addressed. It may be Ibrtunale for sucli siiflerers that the 
Government is not ono of the creditors to whon) tiiey must now appeal for 
indulgence, but that they have only to resort to their neighbors, the merchants, 
for the ready acqnisioii of the facilities they need. Yes, sir, to the abused 
and denounced merchants, upon whom the tradesmen and mechanics, so 
warmly and deservedly eulogized by the gentleman, are immediately depend- 
tnt for credit and employment, and in whose stability (to which the proposed 
relief may prove essential) the only hopes of these tradesmen and mechanics 
H'.-c directly and deeply involved. Lei me advise the gentleman, then, to 
consider whether he can do a greater injury to the very class of whoso in- 
terests he aspires to be regarded as the especial advocate, than by acting 
himself, and endeavoring to persuade the committee to act, u|)on the supposi- 
tion that their interests can be otherwise than injuriously alfected by what- 
ever is calculated to excite distrust, and to produce ill will, and to direct the 
force of the most illiberal prejudice against their only patrons and their best 
friends. Lei him consider, further, whether, at this critical moment, when 
the working classes of New York have their all at stake u[)on the ability of 
the merchants to recover from the disaster which threatens to overwhelm 
them, he will not prove himself the true I'riend of the working classes, by ad- 
vocating, upon this occasion, in reference to their proper object, the claims 
of the merchants. 

Tlie gentleman from Rhode Island makes it another cause of complaint 
against the bill, that it not only [)rovides for the relief of ihosc who are almost 
exclusively merchants, but that some of them, also, do not happen to be 
American citizens. My answer to this objection is, very briefly, that thev 
are, nevertheless, debtors of the Government, and, as such, entitled to share, 
without discrimination, in whatever policy the Government may see fit to 
adopt towards its debtors. It is the honorable characteristic of our commer- 
<:ial system, that it offers every facility for the introduction of foreign capital; 
that it invites to otir ports the ships and the merchants of all nations, (who do 
not refuse to reciprocate the privilege,) and that, in the distribution of bur- 
dens and benefits, it makes no distinction whatever between citizens and 
foreigners. New Y'ork has been built up by the aid of foreign capital and 
■enterprise^ the rcenuo which has been there collected, has been always 
contributed, in a considerable measure, by foreigners or their agents; and 
since, as the gentleman represents, the recent calamity has fallen so heavily 
upon the French and other foreign houses established in the city, the state- 
ment of that fact aflbrds a sufficient reason for extending to them whatever 
benefit they may gain, as debtors of the Government, from the general oper- 
ation of the bill. 

The gcntlenran from Rhode Island has made an elaborate investigation oi 
precedents, and has shown, very conclusively, that the}' do not exhibit a 
Jiniform practice of the Government; but that, deciding every case upon its 
own merits, and with more or less consideration, Congress has sometimes 
granted and sometimes refused applications somewhat similar to this. From 
the number of such precedents, and from the fact that previous decisions 
have been thus contradictory, I can readily infer that there is an inherent 
defect in the existing laws, which, as I believe, and have stated, can only be 
remedied by the introduction of the warehousing system, under which such 
cases could not occur; but, as the precedents do not establish a general rule, 
-and as the present case is marked by circumstances in many respects unpre- 
cedented,! do not sec any thing that should deter us from the exercise of an 
independent judgment in deciding it. 



16 

The genlltMnaii from Rhode Ishiiid grounds another objection upon the 
fact, that the relief aflbrdcd by this bill is so inconsidernhle that it cannot be 
desirable. It is, indeed, fortunate for the merchants, and for the Govern- 
ment, that the fire did not occur a few years sooner, when almost all im- 
ported goods were subject to duly, and, in many instances, a very heavy 
duty, and when of course the average amount of bonds remaining unpaid- 
must have vastly exceeded the sum which is now payable. If the amount 
of duties upon goods destroyed by the fire, instead of being as it is less'thaiT 
a million of dollars, had not been less than five millions, and if the amount 
o( duties upon other goods, payable at the moment, instead of being between 
three and four millions, had not been less than fifteen or twenty millions, I 
agree that the magnitude of the claims of the public debtors would have been 
such that the (Government must have yielded to the necessity, the uncontrollable 
necessity, of the most liberal and extraordinary measures of relief. Still the 
duty of ttjc Government is not to be strictly measured by the magnitude of 
the claims; and if it were, I can deduce no other conclusion from the gen- 
tleman's premises than that, under the existing circumstances of this case, 
we ought to do far more than the bill proposes — a conclusion, to say the least, 
manifestly incompatible with the gentleman's avowed determination to do 
nothing. 

The relief afforded by tho bill, 1 anj free to admit, does not correspond to 
the exigency of the case. I hope that still more may be done; especially that 
another bill for the remission of duties upon goods burned may be reported 
and passed, and that the Secretary of the Treasury may give such a direc- 
tion to the public funds, already collected and constantly accruing at New 
York, as to make them available for the greater accommodation of the mer- 
cantile community, from whom these funds have been deri-'ed. An enlight- 
ened policy seems to me to justify and require such an administration of the 
finances at the present moment; and its results, I am well persuaded, must 
be extensively and permanently beneficial. I say, then, let all this be done; 
and let this bill be passed, in the first instance, as a measure of simple justice 
and manifest expediency, and as an earnest of the disposition of Congress 
to sanction the other measures which should succeed it. Let this bill, at 
least, be judged and decided upon its own merits; and, if there remains no 
other objection to it than that it does not afford suflicient relief, let that ob- 
jection bo removed, as has been just suggested, by further legislation, and by 
the arrangements of the Treasury Department. 

The gentleman from Rhode Island does not exaggerate the inlluence and 
importance of the city of New York. That city sustains a relation to the 
Government and the country which' gives her a right at all times to claim 
from both the most favorable consideration. At the present moment hei 
call upon the Government, specially warranted by the circumstances of hei 
situation, is enforced by numerous and siuuiltaneous demonstrations of the 
approbation of the country. 

It is not the call of New York alone. Phii.adeli'HIA has seconded the 
call with a spirit worthy of the name she bears. Bat.timouf, has instrwcled 
her representatives to sustain her honor by supporting any practicable meas- 
ures of relief Boston, speaking for Massachusetts, has Invoked the mem- 
bers from that State to a like generous co-operation. The memorial of 
New Orleans is the spontaneous and emphatic, utterance of the voice of the 
West. It is not the call of New York alone; but every where, along the 
coast and throughout the interior, wherever there has been an expression of 
public sympathy, it is coupled with an earnest appeal to Congress. Let us 
answer the appeal by an act that shall be worthy of the constituted guardians 
of the national interests and the national honor. 



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